The Banking and Strategy Initiative

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Transunion gets a $3 bln bid | Deal Insight

TransUnion, one of the three leading credit rating agencies in the USA was owned privately by the Pritzkers for years before they valued the baby at $ 2 bln in 2010 and sold a controlling interest to Madison Dearborn. Now that credit rating is in the broad oversight of the new CFPRA the Consumer Finance Protection Bureau, both Madison Dearborn and the Pritzkers have exited, selling to Goldman Sachs Capital Partners and Advent.

Over 200 mln people have their credit reports generated by one of the three rating bureaus. The CFPB has been mandated to supervise non bank markets in consumer finance and lending and its new draft note on rating agencies would cover 7% or the bureaus , i.e. those with more than $7 mln in receipts annually. Similarly, it is also targeting close bank like supervision of all debt collection agencies that recover the average past due $1400 per defaulted consumer , where their receipts are over $ 10 mln for a year. The CFPBgets rule making powers from seven different acts for Regulation P  (Privacy of Consumer information) and consolidates Fair Credit Reporting under the ambit of the erstwhile Fair Credit Reporting Act as well. Its latest regulations on the agencies it can and will supervise as ratings bureaus and debt collectors


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opened yesterday along with the assignation of Transunion by the Pritzkers to Advent. the new law assumes supervisory powers over non bank mortgagors, private education and payday loan companies. These and bank lenders use reports and by CFP estimates 30 such ratings agencies that produce reports will meet the revenue criteria and will be regulated including the top 3, with “banklike supervision” a mandate and may affect their natural inclination to side with lenders

The Advent/GS deal is expected to close in May or June (Q 2) and its current management ( CEO Bobby Mehta) likely to continue according to the terms of the deal

TransUnion was advised by Bank of America and Deutsche Bank and the law firm Latham & Watkins. Evercore advised Advent and Goldman Sachs.


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